Tax evasion in Switzerland could soon be a thing of the past

Contractor accountants should be aware that tax evasion in Switzerland could soon be a thing of the past. It is thought that the UK and Swiss governments are close to formalising a disclosure agreement.

Last weekend, the Sunday Times reported that citizens of the UK holding Swiss banks accounts will need to pay a withholding tax plus a levy on any income that is previously untaxed. Furthermore, details of individual bank accounts will be handed over by the Swiss if HMRC can prove that the accounts have been used for the purpose of tax evasion.

The coalition began negotiations after the formalisation of the Liechtenstein disclosure agreement which gave UK residents the chance to pay a small fine on undeclared taxes and receive immunity from prosecution.

Dave Hartnett, the permanent secretary for tax at HMRC said a deal with the Swiss would be announced within the next couple of months. Reports have hinted that this could be as early as next week.

The recent discussions with Switzerland may be the first of many similar talks with foreign countries that are realising the advantages of disclosure regimes. Last November, Hartnett hinted that the government was in talks to other countries that have been thought of as tax havens.

A lot of overseas banks are now actively examining funds from UK taxpayers to ensure they are fully tax complaint and advisers say undeclared funds or assets are no longer wanted in these countries.

HMRC is continually unearthing more hidden offshore funds and tax evasion is becoming an expensive and risky option.

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